Concerns arise in Chinese bid for genomics firm

The pending sale of a major American gene-mapping company to a Chinese firm is sparking yet another dust-up over what sensitive industries the rising Asian power ought to be allowed to dominate in the United States.

A key question — as it has been with Chinese involvement in aviation, cloud computing and telecom hardware — is whether there are national security concerns attached to allowing a company largely funded by the Chinese government to have access to human DNA being decoded for doctors, researchers and pharmaceutical companies.

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BGI Shenzhen has bid $118 million for Mountain View, Calif.-based Complete Genomics, a sale under review by the Committee on Foreign Investment in the United States. A third gene-mapping company, San Diego-based Illumina, last month offered $123 million, but the board of Complete Genomics rejected that, saying the Chinese bid was of “superior quality.”

Complete Genomics has developed what is seen as the fastest and most cost-effective gene-mapping technology in the field. Their clientele, which BGI would acquire as well, includes the National Cancer Institute, the Mayo Clinic, Eli Lilly, Pfizer and several others. Still, it has filed documents with the Securities and Exchange Commission saying it is hemorrhaging money and could go bust by the end of January if the BGI transaction is nixed or stalled.

The mapping of genomes is both a critical building block for an array of new genetics-based medical treatments and drug development — as well as for the development of frightening new biological weaponry that enemies may use to target specific individuals. A lengthy piece in The Atlantic in November laid out a scenario in which terrorists could soon be capable of using the DNA of the president of the United States to carry out an assassination.

“Because there are questions about the technologies that are involved that are complex, cutting edge and have national security implications related to bioweapons, this bears strict scrutiny,” said Michael Wessel, a commissioner on the United States-China Economic and Security Review Commission, a congressionally appointed advisory panel. “Are there capabilities here that can be adverse to American interests?”

In a confidential letter late last month, Illumina CEO Jay Flatley asked the Complete Genomics board to reconsider rejecting their bid, noting that “national security, industrial policy, personal identifier information protection and other concerns raised in connection with an acquisition … by a foreign state-owned entity create meaningful uncertainty around a BGI acquisition.”

Flatley argued there was no need to sell to a foreign company when a qualified, well-funded American firm was offering more money.

And in a statement to POLITICO, Illumina’s outside attorney, Sharis Pozen, warned Friday, “The genomics field is important to the American economy and U.S. national security.”